Stock Analysis

We Think Waterstone Financial, Inc.'s (NASDAQ:WSBF) CEO Compensation Looks Fair

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We have been pretty impressed with the performance at Waterstone Financial, Inc. (NASDAQ:WSBF) recently and CEO Doug Gordon deserves a mention for their role in it. Coming up to the next AGM on 18 May 2021, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Waterstone Financial

Comparing Waterstone Financial, Inc.'s CEO Compensation With the industry

Our data indicates that Waterstone Financial, Inc. has a market capitalization of US$474m, and total annual CEO compensation was reported as US$1.5m for the year to December 2020. We note that's an increase of 21% above last year. We note that the salary of US$850.0k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.5m. From this we gather that Doug Gordon is paid around the median for CEOs in the industry. Furthermore, Doug Gordon directly owns US$12m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$850k US$850k 58%
Other US$626k US$370k 42%
Total CompensationUS$1.5m US$1.2m100%

Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. Waterstone Financial is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

NasdaqGS:WSBF CEO Compensation May 12th 2021

A Look at Waterstone Financial, Inc.'s Growth Numbers

Waterstone Financial, Inc.'s earnings per share (EPS) grew 61% per year over the last three years. In the last year, its revenue is up 69%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Waterstone Financial, Inc. Been A Good Investment?

We think that the total shareholder return of 37%, over three years, would leave most Waterstone Financial, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Waterstone Financial we think you should know about.

Switching gears from Waterstone Financial, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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